Clinton to Cut Spending Further

By Eric Pianin
and Ruth Marcus

The Washington Post

President Clinton agreed Monday to roughly $55 billion more in spending
cuts over the next five years, responding to pressure from House and Senate
Democrats and calculations by the Congressional Budget Office that he
needed to cut more to reach his deficit-reduction target.

White House press secretary Dee Dee Myers said Clinton "agreed to accept
$55 billion in additional cuts" following a meeting with the House Budget
Committee. He is to meet with the Senate Budget Committee Tuesday, whose
chairman, Sen. Jim Sasser (D-Tenn.) also said he contemplated that amount
of cuts, many from "slowing some investment programs in the beginning."

"I agree that we will have a budget resolution which will be roughly
conforming to the reestimates of the CBO in general terms and that will
still contain the investment strategy that I wanted to do," Clinton told
reporters before a meeting with the Congressional Black Caucus.

Clinton, in a speech earlier in the day to the National League of Cities,
made a pitch for his entire program of economic stimulus and new
"investment" spending, along with tax increases and spending cuts to reduce
the federal budget deficit. "We need to pass the whole program," he said.
Clinton said those who oppose the short-term stimulus plan or additional
"investment" spending "might be characterized as `status quo-like.' "

Moderate and conservative Democrats have complained for weeks that
Clinton's package relied too heavily on tax increases to finance economic
initiatives and to reduce the deficit and have demanded more in spending
cuts.

But, as Myers acknowledged, the additional cuts that the House and Senate
Democrats have settled upon would do little more than enable Clinton to
achieve his original target of reducing the deficit to about $200 billion
by 1997, $140 billion below the projected amount without any action.

In addition, a large chunk of the cuts -- about $17.5 billion of the
roughly $55 billion -- would come in the fifth year. According to Sasser
and others, the cuts would total about $3.8 billion in fiscal 1994 and $11
billion to $12 billion in fiscal 1995.

The cuts are necessary to keep Clinton's budget proposals beneath the
spending caps imposed by the 1990 budget summit and to make up for lost
ground after the CBO declared last week that Clinton's tax and spending
proposals would fall about $67 billion short of his target of reducing the
deficit over the next five years.

Although the CBO and the administration's Office of Management and Budget
used different methods and assumptions in reaching their deficit
projections, Clinton promised to abide by CBO's estimates to avoid
criticism he was resorting to budgetary gimmicks or "smoke and mirrors" --
a criticism that the Democrats frequently leveled against the Bush
administration.

House Budget Committee sources said the $55 billion cumulative figure was
"in the ballpark," although committeee Chairman Martin O. Sabo (D-Minn.)
and other committee Democrats were still meeting last evening to work out
final details of the cuts. Aides to Sasser said Monday night that the
additional cuts might be as high as $73 billion.

The additional savings would be achieved by delaying or trimming some of
Clinton's proposed "investments" in the economy, as well as scores of cuts
in other programs, including defense spending.

Sen. Sam Nunn (D-Ga.) chairman of the Senate Armed Services Committee, gave
a speech last week warning fellow Democrats, including Clinton, who may be
tempted to raid the defense budget for additional savings.

Rep. Barney Frank (D-Mass.) a Budget Committee member, said of the
additional cuts, "It's probably not enough for Sam Nunn to fear for the
safety of Georgia."

Members of the Black Caucus told Clinton Monday that his cuts have hit
federal workers too hard and asked him to reconsider some details. "I don't
think the president has looked at this package as a whole," to consider how
it affects federal workers, District of Columbia Del. Eleanor Holmes Norton
said. Asked about whether she and other caucus members would support that
additional $55 billion in cuts, she said, "We haven't seen it yet so we
didn't complain about it yet."

The House and Senate Budget committees are scheduled to meet Wednesday to
draft budget resolutions that will form the blueprint of Clinton's nearly
$704 billion in tax increases and spending cuts over the next five years to
help boost the economy and reduce the deficit.

Clinton's proposal for spending about $16 billion this year to accelerate
the economic recovery has been challenged by Republicans and some Democrats
who question the need for it in light of a decline in the unemployment rate
and a gradual expansion of the economy.